India - Suzlon to float $400 m wind energy fund

Suzlon Energy, which has raised $552 million through a qualified institutional issue (QIP) on Thursday to repay debts, is set to launch a $400 million fund that would invest in wind energy assets.

“The company is planning to raise close to $400 million from international investors over the next 6-12 months,” investment banking sources close to the development said.

“Suzlon is planning to form a separate company to manage the fund. This would be managed by a professional fund manager,” sources said.

Suzlon shares were down 3.3 per cent or Rs 62.75 at Rs 1,836.75 on the Bombay Stock Exchange on Thursday. A Suzlon Energy spokesperson, however, declined to comment. Sources said the funds would be invested in various wind assets, including those that were not owned by Suzlon.

Analysts said there would be enough possibilities to invest in the power sector with a few of the big projects being cleared recently and a more likely to be given the go-ahead over the next 2-3 years.

“There is enough room for investments in the power sector. Three more ultra mega projects need to be cleared and attractive investment opportunities are there in alternate energy sources. Since all the power firms have already made acquisitions and raised a lot of debt, we can see even private equity and venture funds pouring into the Indian power and infrastructure sector,” said a Mumbai-based analyst with Credit Suisse.

The company is planning to double power generation capacity from the existing 2,700 megawatt to 5,000 megawatt over the next 5 years. Suzlon is also planning capital expenditure of over Rs 2,600 crore to increase capacity.